Vacant Properties - Know the Risks

Owning a vacant building can pose serious liabilities because vacant buildings are more susceptible to vandalism, undetected repairs, fire and other losses. If you own vacant property, it’s advisable to purchase vacant property insurance, also known as vacant building insurance or vacant dwelling insurance, to protect against risks.

Risks

The following are the most prevalent risks to vacant properties:

Fire

Lightning damage

Explosion

Windstorm or hail damage

Smoke

Riot or civil commotion damage

Sprinkler leakage

Sinkhole collapse

Vandalism

Malicious mischief

Squatters

Insurance Solutions

Under certain policies, vacant property insurance can provide protection if your building goes unoccupied for as little as four days. It also protects against liabilities in the event someone is injured on your property and sues for damages. In some cases, it’s required when a property owner dies and the property goes to an estate sale. It may also be a viable option if the property is in the process of being sold or if it’s under construction and is uninhabitable.

In addition to purchasing coverage for a vacant building, take the following actions:

Regularly inspect it for damage or threats of damage

Seal off windows and letterboxes

Install alarm systems that are triggered by intruders, fires or floods

Cost

A typical vacant property insurance policy is one and a half to three times the cost of a property insurance policy due to the increased risks associated with owning an uninhabited building.

If your occupied property becomes vacant, it’s imperative that you notify your broker immediately. If you fail to give adequate notice (in some cases, the required notice is 60 days after it becomes vacant) and you suffer a loss, coverage may be denied. Reach out to an ‘A’ Team member for more info.

Kevin Phillips is a Principal at Assurance who focuses on providing the real estate, property management, development and construction industries with risk management solutions. With over 20 years of experience, Kevin’s primary responsibility to his clients is to provide excellent customer service and equip them with the research and information necessary to make the most informed decisions regarding their insurance and risk management program. Kevin graduated from Wittenberg University with a degree in Business Management. He has also earned his Certified Insurance Counselor (CIC) designation.

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